These non-authoritative audit data standards present
a new way of optimizing efficiency and effectiveness in reporting and assurance
by facilitating automation and enhancements in the analysis of business
information. In addition, audit data standards identify the key information
needed for audits and provide a common framework covering:

data file definitions and technical
specifications;

data field definitions and technical
specifications; and

supplemental questions and data validation
routines to help users better understand the data and assess its completeness
and integrity.

Who will
benefit from their use? A number of stakeholders, from internal and external
auditors to software vendors. Let’s discuss.

Internal/external auditors: Audit data
standards provide internal and external auditors with standardized data on a
timely basis and in a readily usable format. A standard set of company data
will be available to auditors on demand, eliminating the need to normalize
inconsistent data sets and/or different sources of data. This is a great way
for auditors to now focus their time and expertise on interpreting audit output
and making judgments based on standardized data (validated), instead of
spending time accessing and normalizing inconsistent data. Audit data
standardization will also allow auditors to drill down and better identify
higher risk areas or suspect transactions that will enhance the traditional
audit process and enable it to become more dynamic and comprehensive.

All CPAs, plus managers and non-CPAs in business and industry: The benefits of audit data standards are all encompassing and CPAs in
business and industry as well non-CPA management will also find value in their
use. Audit data standardization will provide companies with data consistency
and the opportunity for more extensive data analysis. By providing real-time
access to key general ledger and subledger data in a standardized format, audit
data standards will enable enhanced analytics to be performed on company
information, leading to insights such as potential growth opportunities and
areas for improvement. This will not only enhance the value of the audit, but
will also facilitate enhanced decision-making by company management. Similar to
the ways in which audit data standards aid auditors, they will enable companies
to drill down and better identify higher risk areas or suspect transactions and
will assist with standardizing analysis across multiple business units that may
have been acquired with different reporting systems still in place. By
utilizing one common framework, this will allow for similar analysis that can
be shared across the locations. Companies and individual business units will be
able to:

better evaluate key metrics in order to substantively predict company
performance;

analyze growth opportunities; and

screen for questionable transactions.

Audit committee members: With audit data
standards in use, audit committee members will receive more timely and valuable
information that will assist in their oversight of the quality and integrity of
the company’s financial process.Auditors will consistently deliver
a more timely and detailed analysis of business performance to audit committee
members that will support effective oversight.

Software vendors:
Producers of analytic software will also find audit data standards helpful, because
they can now begin to develop ready-made extraction programs to provide common
data views of production data for companies to implement in their systems. Instead
of companies having to interrogate their systems with custom queries, software
providers could implement the extraction programs directly into the existing
system.Software providers could also offer audit
data interchange in a cloud or similar means designed as an external, secure
data repository, in which companies and auditors could access data on demand.

These are just a
few of the many exciting opportunities that these standards can offer the CPA
profession and businesses.

You can
access the audit data
standards, through
the AICPA’s Financial
Reporting Center. You’ll notice that the base standard provides additional field
and file information to be used in conjunction with both the general ledger and
accounts receivable subledger standards, while the general ledger standard and
accounts receivable subledger standard offer field and file information
specific to those accounts. The standards are offered in flat file format (pipe-delimited
UTF-8 text file format) as well as eXtensible Business Reporting Language Global
Ledger Taxonomy Framework.

How do you
think audit data standards will change your firm’s audits or your business?